Multiple Choice
Jake loaned Elwood $6000 for one year at a nominal interest rate of 12 percent. After Elwood repaid the loan in full, Jake complained that he could buy 5 percent fewer goods with the money Elwood gave him than he could before he loaned Elwood the $6000. What was the rate of inflation during the year?
A) 2.5 percent
B) 7.0 percent
C) 8.0 percent
D) 17.0 percent
Correct Answer:
Verified
Correct Answer:
Verified
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